Fatwa #69734 November 2002United States of America
Are Muslims allowed to operate and own businesses, if interest is needed to get them up and running (and almost all businesses need interest to start off unless the business is paid for in cash).
Question
1. I understand that under major islamic opinion muslims in the west and american are entitled to purchase one house with interest for the sake of a better living etc. My question is, are Muslims allowed to operate and own businesses, if interest is needed to get them up and running (and almost all businesses need interest to start off unless the business is paid for in cash). 2. My brother wants to send my parents to Hajj, however he owns a house and a car that are not paid off for, although he can afford to send my parents. What is major scholarly opinion on this matter and if you can, please briefly explain (at least a yes or no) what the 4 madhabs say on this. Jazak Allah
Answer
In principle, interest is totally forbidden in Islam, be it with regards to business, house or anything else.
You state that ?almost all businesses need interest to start off unless the business is paid for in cash.? However, this is not the case. Generally, businesses start off in a small way, whereby a person needs minimum capital which he himself can afford or he takes a loan from any reliable person since it is a small amount. No person just decides overnight to open up a major business which needs a large amount of capital whereby he will have to take a loan from the bank and in doing so, deal with interest.
Therefore, if you are worried about dealing with interest, then this is because of the procedure that you intend taking. We suggest that you start off your business in a small way, with little capital and you may expand later on as things go well.
and Allah Ta'ala Knows Best
Mufti Ebrahim Desai
You state that ?almost all businesses need interest to start off unless the business is paid for in cash.? However, this is not the case. Generally, businesses start off in a small way, whereby a person needs minimum capital which he himself can afford or he takes a loan from any reliable person since it is a small amount. No person just decides overnight to open up a major business which needs a large amount of capital whereby he will have to take a loan from the bank and in doing so, deal with interest.
Therefore, if you are worried about dealing with interest, then this is because of the procedure that you intend taking. We suggest that you start off your business in a small way, with little capital and you may expand later on as things go well.
and Allah Ta'ala Knows Best
Mufti Ebrahim Desai